TAIPEI, Oct. 30, 2020 /PRNewswire/ -- Chunghwa Telecom
Co., Ltd. (TAIEX: 2412, NYSE: CHT) ("Chunghwa" or "the Company")
today reported its un-audited operating results for the third
quarter of 2020. All figures were prepared in accordance with
Taiwan-International Financial Reporting Standards ("T-IFRSs") on a
consolidated basis.
(Comparisons throughout the press release, unless otherwise
stated, are made with regard to the prior year
period.)
Third Quarter 2020 Financial Highlights
- Total revenue increased by 2.6% to NT$
52.17 billion.
- Mobile communications revenue decreased by 8.5% to NT$ 21.63 billion.
- Internet revenue increased by 1.2% to NT$ 7.46 billion.
- Domestic fixed communications revenue increased by 20.9% to
NT$ 18.85 billion.
- International fixed communications revenue decreased by 25.5%
to NT$ 2.14 billion.
- Total operating costs and expenses increased by 2.2% to
NT$ 41.73 billion.
- Net income attributable to stockholders of the parent increased
by 3.2% to NT$ 8.35 billion.
- Basic earnings per share (EPS) was NT$1.08.
Mr. Chi-Mau Shieh, Chairman and
CEO of Chunghwa Telecom, said, "We achieved solid results in the
third quarter of 2020 as a result of our successful business
strategy and the hard work of our employees throughout the
company."
"We are pleased to announce we maintained our leading market
position in the mobile business. With the launch of the iPhone 12
in October, we are optimistic to exceed our annual target for 5G
service adoption by the year end. To prepare for the expected high
demand, we managed to finish construction of more than 3,000 base
stations by the end of the quarter. As we continued to migrate
subscribers to higher-speed service, we also experienced an uplift
in the ARPU of broadband business. MOD maintained its outstanding
market position, and we will continue to enrich the content to
attract more subscribers. Our ICT project experienced robust growth
with an 84.9% revenue increase year over year, and with the ongoing
trend in work and study from home, we continued to see strong
demand of IDC services, which has driven us to work on our next
business expansion."
"Backed by our clear, strategic focus, strict cost saving
measures and strong balance sheet, we remain confident in our
ability to achieve healthy and sustainable long-term growth while
delivering sustainable value to our shareholders," Mr. Shieh concluded.
Revenue
Chunghwa Telecom's total revenues for the third quarter of 2020
increased by 2.6% to NT$ 52.17
billion.
Mobile communications revenue for the third quarter of 2020
decreased by 8.5% to NT$ 21.63
billion. This was mainly due to the decrease in handset
sales revenue and the decrease in mobile service revenue resulted
from market competition, VoIP substitution, as well as the impact
of COVID-19 on roaming revenue.
Internet business revenue for the third quarter of 2020
increased by 1.2% to NT$ 7.46
billion.
Domestic fixed revenue for the third quarter of 2020 increased
by 20.9% year over year to NT$ 18.85
billion, mainly due to the increase of ICT project revenue
driven by the completion of major projects.
International fixed communications revenue decreased by 25.5% to
NT$ 2.14 billion.
Operating Costs and Expenses
Total operating costs and expenses for the third quarter of 2020
increased by 2.2% year over year to NT$
41.73 billion, mainly due to the increase of ICT project
costs, which offset the decrease of cost of goods sold and
interconnection costs.
Operating Income and Net Income
Income from operations for the third quarter of 2020 increased
by 7.1% to NT$ 10.72 billion. The
operating margin was 20.6%, as compared to 19.7% in the same period
of 2019. Net income attributable to stockholders of the parent
increased by 3.2% to NT$ 8.35
billion. Basic earnings per share was NT$1.08.
Cash Flow and EBITDA
Cash flow from operating activities for the third quarter of
2020 increased by 3.9% year over year to NT$
20.44 billion, mainly due to the increase in the collection
of accounts receivable.
Cash and cash equivalents, as of September 30th, 2020, decreased by
26.4% to NT$ 17.71 billion as
compared to that as of September
30th, 2019. The decrease was mainly
attributable to the payment of concession fees for the 5G frequency
spectrum auction, which was partially offset by the increase in
short-term bills payable and bonds payable.
EBITDA for the third quarter of 2020 increased by 6.8% to
NT$ 20.09 billion. EBITDA margin was
38.51%, as compared to 36.99% in the same period of 2019.
Business and Operational Highlights
Broadband/HiNet
The Company continued to execute its strategy of encouraging
FTTx migration. As of September
30th, 2020, the number of FTTx subscribers
reached 3.63 million, accounting for 83.1% of the Company's total
broadband users. Moreover, the number of subscribers signing up for
speeds of 100Mbps or higher increased by 11.3% year over year,
reaching 1.72 million.
HiNet broadband subscribers decreased by 1.5% year over year to
3.60 million as of September
30th, 2020.
Mobile
As of September 30th,
2020, Chunghwa Telecom had 11.27 million mobile subscribers,
representing a 6.0% year-over-year increase.
Fixed line
As of September 30th,
2020, the Company maintained its leading position in the fixed-line
market, with a total of 9.96 million subscribers.
Financial Statements
Financial statements and additional operational data can be
found on the Company's website at
http://www.cht.com.tw/en/home/cht/investors/financials/quarterly-earnings
NOTE CONCERNING FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements. These
statements constitute "forward-looking" statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
and as defined in the U.S. Private Securities Litigation Reform Act
of 1995. These forward-looking statements can be identified by
terminology such as "will," "expects," "anticipates," "future,"
"intends," "plans," "believes," "estimates" and similar statements.
Statements that are not historical facts, including statements
about Chunghwa's beliefs and expectations, are forward-looking
statements. Forward-looking statements involve inherent risks and
uncertainties that could cause actual results to differ materially
from the forward-looking statements. A number of important factors
could cause actual results to differ materially from those
contained in any forward-looking statement. Investors are cautioned
that actual events and results could differ materially from those
statements as a result of a number of factors including, but not
limited to the risks outlined in Chunghwa's filings with the U.S.
Securities and Exchange Commission on Forms F-1, F-3, 6-K and 20-F,
in each case as amended. The forward-looking statements in this
press release reflect the current belief of Chunghwa as of the date
of this press release and Chunghwa undertakes no obligation to
update these forward-looking statements for events or circumstances
that occur subsequent to such date, except as required under
applicable law.
This press release is not an offer of securities for sale in
the United States. Securities may
not be offered or sold in the United
States absent registration or an exemption from
registration. Any public offering of securities to be made in
the United States will be made by
means of a prospectus that may be obtained from the issuer or
selling security holder and that will contain detailed information
about the company and management, as well as financial
statements.
NON-GAAP FINANCIAL MEASURES
To supplement the Company's consolidated financial statements
presented in accordance with International Financial Reporting
Standards pursuant to the requirements of the Financial
Supervisory Commission, or T-IFRSs, Chunghwa Telecom also
provides EBITDA, which is a "non-GAAP financial
measure". EBITDA is defined as consolidated net income (loss)
excluding (i) depreciation and amortization, (ii) total net
comprehensive financing cost (which is comprised of net interest
expense, exchange gain or loss, monetary position gain or loss and
other financing costs and derivative transactions), (iii) other
income, net, (iv) income tax, (v) (income) loss from
discontinued operations.
In managing the Company's business, Chunghwa
Telecom relies on EBITDA as a means of assessing
its operating performance because it excludes the effect of
(i) depreciation and amortization, which represents a non-cash
charge to earnings, (ii) certain financing costs, which are
significantly affected by external factors, including interest
rates, foreign currency exchange rates and inflation rates, which
have little or no bearing on our operating performance, (iii)
income tax (iv) other expenses or income not related to the
operation of the business.
CAUTIONS ON USE OF NON-GAAP FINANCIAL MEASURES
In addition to the consolidated financial results prepared
under T-IFRSs, Chunghwa Telecom also provide non-GAAP
financial measures, including "EBITDA". The
Company believes that the non-GAAP financial measures
provide investors with another method for assessing its operating
results in a manner that is focused on the performance of its
ongoing operations.
Chunghwa Telecom's management believes investors will
benefit from greater transparency in referring to these non-GAAP
financial measures when assessing the Company's operating results,
as well as when forecasting and analyzing future periods. However,
the Company recognizes that:
- these non-GAAP financial measures are limited in their
usefulness and should be considered only as a supplement to the
Company's T-IFRSs financial measures;
- these non-GAAP financial measures should not be considered in
isolation from, or as a substitute for, the
Company's T-IFRSs financial measures;
- these non-GAAP financial measures should not be considered to
be superior to the Company's T-IFRSs financial measures;
and
- these non-GAAP financial measures were not prepared in
accordance with T-IFRSs and investors should not assume that
the non-GAAP financial measures presented in this earnings release
were prepared under a comprehensive set of rules or
principle.
Further, these non-GAAP financial measures may be unique to
Chunghwa Telecom, as they may be different from non-GAAP financial
measures used by other companies. As such, this presentation of
non-GAAP financial measures may not enhance the comparability of
the Company's results to the results of other companies.
Readers are cautioned not to view non-GAAP results as a substitute
for results under T-IFRSs, or as being comparable to results
reported or forecasted by other companies.
About Chunghwa Telecom
Chunghwa Telecom (TAIEX 2412, NYSE: CHT) ("Chunghwa" or "the
Company") is Taiwan's largest
integrated telecommunications services company that provides
fixed-line, mobile, broadband, and internet services. The Company
also provides information and communication technology services to
corporate customers with its big data, information security, cloud
computing and IDC capabilities, and is expanding its business into
innovative technology services such as IoT, AI, etc. In recent
years, Chunghwa has been actively involved in corporate social
responsibility and has won domestic and international awards and
recognition. For more information, please visit our website at
www.cht.com.tw
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SOURCE Chunghwa Telecom